The Skinny on the White House Big Data Report

While the public debate on privacy has largely focused on how government, particularly the intelligence community, collects, stores, and uses data, President Obama earlier this year announced a comprehensive review of the impact big data technologies are having, and will have, on a range of economic, social, and government activities.

The White House wrapped up its big data review last week, examining how big data has redefined the way Americans live and work, and how this new technology will likely transform the relationships between government, citizens, businesses, and consumers. The report focused on data that is so large in volume, so diverse in variety or moving with such velocity, that traditional modes of data capture and analysis are insufficient—characteristics colloquially referred to as the "3 Vs."

The report recognized that the declining cost of collection, storage, and processing of data, combined with new sources of data like sensors, cameras, and geospatial and other observational technologies, means that we live in a world of near-ubiquitous data collection. Woven throughout the report is the idea that with so much data being collected nonstop by machines and people all around us, the traditional "notice and consent" framework for privacy protections may not be practical.

The report suggests that policymakers need to consider whether future rules governing privacy should focus more directly on how that information can and can't be used. The White House reiterated its support for a digital privacy standard that is "consistent with that afforded in the physical world," and called for enactment of national data-breach legislation.

While the review examined how the public and private sectors can maximize the benefits of big data while minimizing its risks, it also identified specific opportunities for big data to grow our economy, improve health and education, and make our nation safer and more energy efficient.

According to the report, big data holds the potential to streamline the provision of public services, increase the efficient use of taxpayer dollars at every level of government, and substantially strengthen national security. Overall, the report recognizes that the big data revolution presents incredible opportunities in virtually every sector of the economy and every corner of society.

In the health care sector, for example, the Centers for Medicare and Medicaid Services have begun using predictive analytics software to flag likely instances of reimbursement fraud before claims are paid. According to the White House report, the Fraud Prevention System helps identify the highest risk health care providers for fraud, waste and abuse in real time, and has already stopped, prevented or identified $115 million in fraudulent payments—saving $3 for every $1 spent in the program's first year.

Volumes of data that were once unthinkably expensive to preserve are now easy and affordable to store on a chip the size of a grain of rice. Responsibly employed, big data could lead to an aggregate increase in actual protections for the civil liberties and civil rights afforded of citizens, as well as drive transformation improvements in the provision of public services.

Big data also raises serious questions about how we protect our privacy and other values in a world where data collection is increasingly ubiquitous and where analysis is conducted at speeds approaching real time. While large data sets are leading the way toward advancements in health care, energy, and agriculture, the report also cautions that improper use of data can result in discrimination against "vulnerable classes."

Big data technologies have enabled data collection that is more widespread, invasive, and valuable than ever. Certain private and public institutions have access to more data and more resources to compute it, potentially heightening asymmetries between institutions and individuals. At its core, public-sector use of big data heightens concerns about the balance of power between government and the individual.

This new cache of collected and derived data is of huge potential benefit but is also unevenly regulated. The United States has seen a legal framework for the protection of privacy interests evolve that includes constitutional, federal, state, and common law elements.

At a constitutional level, the Fourth Amendment protects the "right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures." Article I, Section 2 of the Constitution also mandates a decennial Census in order to apportion the House of Representatives, so data collection has an equally long history in the United States.

In the 1970s and 80s, more narrow sector-based privacy laws began to supplement the tort-based body of common law. These sector-specific laws create privacy safeguards that apply only to specific types of entities and data. With a few exceptions, individual states and the federal government have predominantly enacted privacy laws on a sectoral basis.

For example, the Fair Credit Reporting Act (FCRA) was originally enacted in 1970 to promote accuracy, fairness, and privacy protection with regard to the information assembled by consumer reporting agencies for use in credit and insurance reports, employee background checks, and tenant screenings. The law protects consumers by providing specific rights to access and correct their information and requires companies that prepare consumer reports to ensure data is accurate and complete.

In the health care sector, the Health Insurance Portability and Accountability Act (HIPAA) was enacted in 1996 to address the use and disclosure of individuals' health information by specified "covered entities" and includes standards designed to help individuals understand and control how their health information is used. A key aspect of HIPAA is the principle of "minimum necessary" use and disclosure.

Similarly, in the financial sector, Gramm-Leach-Bliley mandates that financial institutions respect the privacy of customers and the security and confidentiality of those customers' nonpublic personal information. Other sectoral privacy laws safeguard individuals' educational, communications, video rental, and genetic information.

The White House review concluded with six discrete policy recommendations, including advancing the Consumer Privacy Bill of Rights, passing national data breach legislation, and amending the Electronic Communications Privacy Act. The critical question is whether or how the White House will act on its findings.

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